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Las Vegas Foreclosure Listings Growing in Commercial Sector

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By : John Cutts    99 or more times read
Las Vegas foreclosure listings have been growing in the commercial sector, just like in many cities throughout the country, according to officers of the Southern Nevada unit of the National Association of Industrial and Office Properties.

According to commercial real estate experts in Southern Nevada, the city's high unemployment rate has been pushing down commercial occupancy rate. The jobless rate in the city has surpassed the 13-percent level.

Investors looking for cheap commercial properties can find a lot in Las Vegas because commercial real estate prices in the area have fallen by as much as 70 percent, according to John Wright, a top executive at National Valuation Consultants.

Patricia Nooney, director of the Las Vegas unit of commercial broker CB Richard Ellis, said that commercial real estate prices in Las Vegas shot up during the boom, so it is expected that price declines are significant.

Nooney also added that consumers have not been spending, so there are no businesses needing rental spaces. She predicted that vacancy rates will hit their peak after 2010 and rents will grow only after 2011.

Meanwhile, Bob Walter, the executive vice president of Nevada State Bank, said that his bank will release its Las Vegas foreclosure listings for its distressed commercial properties in the last quarter of this year. He said that his bank will address the problem of distressed commercial properties quickly by selling them off in the last quarter and the first quarter of next year.

He explained that Nevada State Bank has plenty of capital, so it can afford to sell its troubled commercial properties at lower prices. He said that other banks with less capital cannot sell their troubled commercial assets for lower than 80 percent of mortgage amounts.

Walter added that his bank wants to clean up its loan portfolio so it will sell its distressed commercial assets even at a big loss.

Nooney of CB Richard Ellis said that the Federal Deposit Insurance Corporation takes about 3 to 4 months to sell the distressed properties it seizes from failed banks. Typically, the Fed bundles the properties into packages of at least $250 million and then sell them off to institutional investors.

According to Walter of Nevada State Bank, lenders need to look at other options before foreclosing on properties. He added that reducing interest rates or allowing short sales can reduce loan losses from distressed commercial assets.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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